Corn Prices

[blufford]

If corn is listed on the Chicago Board as 6.50 a bu. how much would the farmer get?

[ksfarmer]

Here at the local co-op, todays cash price is 6.18 and I think the CBOT closed at 6.43 (?). The local cash price varys from location to location.

[littlebitfarm]

Price also depends on how dry the corn is. High moisture corn needs to be dried and they pay less for it.

Kathie

[Windy in Kansas]

It depends upon how the farmer sold it. Many now sell theirs on paper on the Board of Trade, often at the insistence of lenders, etc. Therefore it would also depend upon which contract month he had and at what price he had locked in his price. Also if the farmer actually fulfilled the contract and made physical delivery of it as specified.

If you are speaking of the local price offered to the farmer by a local grain sales point then that is an entirely different matter. Grain elevators must take into account many things such as transportation, bonding fees to cover, insurance, loss during transit, profit, etc. so offer far less than CBOT prices.

You did say the Chicago Board of Trade so it would also depend upon where the farmer can delivery his crop and how much that middleman/elevator, etc. must pay for transportation to fulfill the contract.

Some prices for Kansas today as follows.
TERMINAL US NO 2 YELLOW CORN
Bids Change (¢/bu) Basis Change
Atchison 6.4050 DN 5 7Z UNCH
Topeka 6.5050 DN 5 17Z UNCH
Salina 6.4850 DN 5 15Z UNCH
Newton 6.4800 DN 5 14.5Z UNCH
Hutchinson 6.5100 DN 5 17.5Z UNCH
Wellington 6.4800 DN 5 14.5Z UNCH
Arkansas City 6.4300 DN 5 9.5Z UNCH
-----
Sorry, I should have provided my source. http://usda.mannlib.cornell.edu/usda/ams/DC_GR112.txt

[fantasymaker]

I think the term for the difference between local and CBOT is called Basis.
Here that has run from 48 cents over the Cbot to way way under ,like a buck.

[geo in mi]

Use this to see CBOT, then scroll down to get your local co-op or dealer to see cash price, and Basis will be listed too http://www.agriculture.com/markets

Definition of basis: http://agebb.missouri.edu/mgt/risk/basis.htm

You'll get the cash price at your local dealer, less any dockages for moisture, quality, etc, etc......

geo

[blufford]

Thanks for the responses. Who pays transportation cost to the grainery?

[DaleK]

Farmer pays everything until it's in place and condition to sell and sold. Transportation, drying, dockage, elevation

[Ross]

Farmers seem to always buy retail and sell wholesale.

[geo in mi]

Originally Posted by Ross

Farmers seem to always buy retail and sell wholesale.

Commodity farmers do. But there are some farmer owned co-operatives which control the product thru to the grocery store: Welch's(grape juice), Knauss Foods(applesauce and juice), some orange grower co-ops. Dean Foods is supposedly a co-op for milk products, but some think it has muscled out all competition and is really a monopoly price fixer. But, none for corn, soybeans, wheat, and cotton.

Then there are the large "farm" corporations--ConAgra, Tysons, Dole, Chiquita Bananas, Campbell Soup, the vertically integrated Pork Powerhouses like Smithfield which just "contract" with growers--but then we already had heated threads about the large corps.

geo

[rambler]

I sell all my bulk grain - field corn, soybeans, little oats - through 2 local coops, which are part of Cenex, which is now Cenex-Harvest States, which is a big coop. Frankly it is so big it is just another Conagri or ADM or Bunge, but still and all, it is a coop stucture of business, I get dividends and such.

Corn is my resonsibiliy until I deliver it to the elvator, and they will pay me the local price, which here in MN is typically 30 to 80 cents less than the CBOT quoted price. The price differernce is called a 'basis' as mentioned, and will change during the year, depends on how much corn is available and how much demand there is to buy corn. Weather scares also influence this. Of late investors have influenced it too, they tend to bid the CBOT price up, so the basis tends to get worse, as _real_ corn still trades for what it is worth to someone who wants to use real corn.

In some areas like Texas, or the SE USA, often times corn is worth more than the CBOT, their basis is a positive number, because they use more corn than they grow, and need to pay a lot of shipping to haul it in from places like here in MN.

So on any given day, the price of corn will change in local value, and both the CBOT 'national' price and the local 'basis' adjusted price can & will change.

--->Paul